Ex-Mining Chiefs Plot Comebacks – by John W. Miller (Wall Street Journal – July 30, 2013)


Mining CEOs Who Were Sent Packing Return to the Industry.

Mining-company chief executives who were recently sent packing are beating a trail back to the industry, and two have already established investor funds and are looking for backers.

Is it smart to fund people who, if their companies were combined, had billion-dollar write-offs on assets acquired during their watch?

Aaron Regent, the former CEO of Barrick Gold Corp., ABX.T -4.06% thinks so. “There are opportunities out there, and there may be situations where you see value that others don’t,” he says.

Mr. Regent started a Toronto-based fund this year mainly to buy mines in the Americas. He says he signed deals with “a number of financial partners” but concedes it is a challenging market. “The Chinese are going to be competitors for sure.”

Mr. Regent is one of the five major mining bosses ousted in the last two years, due in large part to cost overruns and poor share performance. Others in the group are Cynthia Carroll of Anglo American AAL.LN -0.81% PLC, Tom Albanese of Rio Tinto, Mick Davis of Xstrata PLC, and Marius Kloppers of BHP Billiton Ltd. BHP.AU -0.60%.

Four of the five, none of whom is close to retirement age, are planning to return to mining, according to the executives, their representatives or people familiar with their thinking. Mr. Kloppers, a former McKinsey & Co. consultant, is weighing whether he would prefer to teach business, say those familiar with his thinking. He didn’t return calls and emails seeking comment.

“These are serious CEOs, so they should be taken seriously,” says Francis Johnstone, an investment adviser for Baker Steel Resources Trust Ltd., BSRT.LN +5.58% a London-based fund invested in mines. “But they’ve had some black marks on their reputations, so they’ll have to show they have good projects.” He still hasn’t decided whether to invest with one of them.

The executives argue that they have expertise in running mines and smelters and did so profitably for years, only to get burned by a big drop in prices. They have learned from their missteps, they say, and there are plenty of opportunities.

Among potential investments: Glencore Xstrata PLCs Las Bambas copper mine in Peru, some BHP coal operations in Australia, much of Rio Tinto’s RIO.LN -0.10% aluminum division, and Anglo American’s platinum divisions and its Minas Rio iron-ore mine in Brazil.

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